Is bigger cheaper?

01.Unit pricing

Our comparison of the prices of various brands and sizes of everyday items in major supermarkets confirmed what most shoppers already know — it's hard to choose the best value.

This is particularly true for those of us who haven’t the time (or can’t be bothered) to get our calculator out and comprehensively compare the value of variously priced and sized products during our routine grocery shop.

If supermarkets displayed the unit price — the price per litre or kilogram for example — of items choosing the best value would be an easy task.

We called for supermarkets to introduce unit pricing, which Aldi began in November 2007.

Please note: this information was current as of March 2007 but is still a useful guide to today's market.

Stop press!

Supermarkets across the nation will be required to implement unit pricing following recommendations outlined in the Australian Competition and Consumer Commission’s (ACCC) grocery inquiry.

The new pricing system – already used by Aldi since last November — will show a product’s cost per unit of measure. The unit price (for example, cost per kilo or litre) will appear on supermarket shelves alongside the normal ticketed price, allowing easy comparison across brands regardless of product size.

Example 1: When the bigger tin is worse value

In this case, the unit price of the 1.2 kg of Pedigree dog food works out at 22% more expensive than the same product in the smaller-sized tin. How many people would opt for the larger quantity, assuming they’d save money? If supermarkets displayed the price per kg, you’d know their respective prices were $2.21 per kg and $1.81 per kg.

Price

Quantity

Price per kg

$2.65

1.2 kg

$2.21

Small tin

Price

Quantity

Price per kg

$1.27

700 kg

$1.81

Example 2: Corn flake choices

There wasn’t much difference in the 525 g and 825 g packets of Kellogg’s Cornflakes in terms of value for money (around 2%) when we checked. But the 310 g box works out at 38% more expensive than the 825 g box, and if you like those cute little single-serve packets, expect to pay 170% to 600% more for the convenience. Displaying the price per kg would make these realities clearer.

Often, buying supermarkets' own-brand varieties usually results in significant savings (up to 30% or so in this instance if you chose the 500 g Coles Smart Buy box, instead of the 525 g Kellogg’s box, and bigger savings if you chose larger packets).

Unit pricing would make the true costs obvious, helping you identify the premium for a well-known brand name and whether it’s worth paying.

Prices used in both examples were collected in a large Sydney supermarket, December 2006.

CHOICE verdict

We want supermarkets to display the unit price (such as the price per per kilogram or litre) for all relevant items. They already have to do this for meat, fruit and vegetables.

Unit price displays would save shoppers time and money.

It'd also help you spot supermarket sales tactics — such as when bulk buying doesn’t provide the best value.

24 Sep 2007
|
As you stroll the aisles of Aldi, Woolies or Coles, do you wonder whether the growing number of supermarket-owned premium varieties are worth trying, or if they’re inherently inferior to "name" brands?